In no uncertain terms -> It does work. The most common gaffe I see is "crossover" cables, no assigning of valid IP addresses (you didn't tell if you did this and it is not automatic), plus people install a firewall before the network is working. has all I need to know to get this to work, but if one has no IP address assigned or doens't know if such is "valid" and well, the list goes on.

Did you install a firewall? Did you know that turning the usual firewall off still can cause filesharing to fail?